Everyone talks about renewable energy, but how can we make it happen – or, better yet, how can we make it happen more consistently?

The answer may well be through Renewable Portfolio Standards (RPS). An RPS is a policy that requires retail electricity suppliers to procure a certain minimum quantity of eligible renewable energy. RPS purchase requirements typically increase over time.

Along with federal tax incentives, RPS policies have emerged as one of the most important drivers of renewable energy capacity additions.

Currently, 25 states and Washington, D.C. are requiring utilities to use RPS policies and an additional four states have non-binding goals, according to the U.S. Department of Energy's Lawrence Berkeley National Laboratory (Berkeley Lab). Eleven of these states currently have at least four years of operational experience with RPS policies.

"State RPS policies require utilities to buy a certain amount of renewable energy, and these programs have emerged as one of the most important drivers of renewable energy deployment in the United States," notes Ryan Wiser, of Berkeley Lab's Environmental Energy Technologies Division (EETD). But there is no common design to these policies, according to the Lab.

Collectively, the RPS policies in place apply to nearly 50% of total U.S. electricity load. It is estimated that approximately 46% of nationwide retail electricity sales will be covered by the mandatory state RPS policies through the end of 2007 once these programs are fully implemented. If we include the four states with non-binding renewable energy goals, the figure reaches almost 51%.

Thus far, states seem to elect one of three RPS models:

• In states with retail electric competition, electricity suppliers are typically given broad altitude to comply with RPS requirements as they see fit;
• In states with still-regulated utility monopolies, electricity regulators oversee utility procurement and contracting; and
• In New York and Illinois, a state agency a state agency has direct responsibility to conduct utility procurement.

At the moment, more than 50% of the non-hydro renewable capacity additions in the United States from 1998-2007 occurred in states with RPS programs. Of the more than 8,900 megawatts of non-hydro renewable energy capacity that has come online in RPS states, 93% came from wind power, 4% from biomass power, 2% from solar power, and 1% from geothermal power. The Berkeley Lab anticipates increased diversification over time.

More and more states are turning to solar-specific RPS policies, according to the Berkeley Lab. Fully 11 states and Washington, D.C. have adopted solar or distributed generation set-asides. These programs account for substantial amounts of increased solar capacity.

Many states have found that transmission has become an issue in achieving RPS goals, or it will be as targets increase. For instance, the states of Nevada anticipates that it will not be able to achieve RPS requirements without a transmission line to connect Nevada Power and Sierra Pacific Power Company.

Berkeley Labs anticipates price drops as a result of RPS programs. But data have not yet been collected in a way that enables these types of comparisons.

Perhaps most important, the Berkeley Lab has found that these programs have completely or almost completely achieved their early-year targets. Energy prices, though, have varied across states and over time, due to variations in RPS program designs.

The popularity of these programs continues to grow. Several states are already considering creating RPS policies. And if experience is any guide, states without an RPS policy will be added to the RPS roster in 2008.